The elements which regulate gene expression have traditionally been identified by their effects on reporter genes which have been transfected into cell lines or animals. It is generally assumed that these elements have a comparable role in expression of the corresponding endogenous locus. Nevertheless, several studies of immunoglobulin heavy-chain (IgH) gene expression have reported that the requirements for expressing IgH-derived transgenes differ from the requirements for expression of the endogenous IgH locus. Thus, although expression of transgenes requires multiple elements from the J H -C intron-the E core enhancer, the matrix attachment regions (MARs) which flank E, and several switch-associated elements-B-cell lines in which expression of the endogenous heavy-chain gene is maintained at the normal level in the absence of these intronic elements have occasionally been reported. Gene targeting offers an alternative method for assessing regulatory elements, one in which the role of defined segments of endogenous genes can be evaluated in situ. We have applied this approach to the IgH locus of a hybridoma cell line, generating recombinants which bear predetermined modifications in the functional, endogenous heavy-chain gene. Our analysis indicates the following. Chromatin fibers appear to exist as loops which are anchored to the nuclear matrix, or scaffold (reviewed in reference 25). The loops are thought to correspond to functional domains in which the transcriptional state of one domain is largely independent of its neighbors. It is generally considered that the sites of anchorage in the DNA have a particular affinity for the matrix and can therefore be identified as matrix attachment regions (MARs) or scaffold attachment regions.As illustrated in Fig.